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Nissan: Corporate Rap Sheet

Nissan

By Philip Mattera

Nissan, previously known as Datsun, rose to the top tier of global car companies three decades ago, but later found itself struggling. The company avoided disaster by forming an alliance with Renault in 1999, and has been sharing a chief executive with the French company since 2005. Nissan has withstood a series of union organizing efforts at its heavily subsidized U.S. operations.

Environment and Product Safety

When engine emissions and automobile safety first became major policy issues in the United States in the mid-1960s, Nissan grumbled about cost-benefit considerations but then set out to modify its vehicles to meet the new requirements. The company spent more than $60 million in this effort. One result was the Nissan Anti-Pollution System (NAPS-Z), a new type of engine introduced in 1978 that reduced hydrocarbon emissions by improving the efficiency of fuel burning, and lowered nitrous oxide emissions by increasing the amount of exhaust gas recirculated into the incoming fuel.

More recently, Nissan was among the major automakers that complained about the stricter greenhouse gas emissions limits proposed by the European Union, even though the company’s mostly small cars have a lower carbon footprint than some of its competitors. Nissan resisted the move toward hybrids, but in 2008 the company announced plans to introduce an all-electric car in the U.S. and Japanese markets. In 2010 Nissan began selling its battery-powered Leaf in the United States, claiming it would get the fuel equivalent of 99 miles per gallon.

In March 2014 Nissan recalled nearly 1 million vehicles to correct an airbag malfunction. In May 2015 another 1.6 million such vehicles were recalled.

In May 2016 the South Korean government accused Nissan of cheating on auto emissions testing.

Labor

After Nissan was reorganized after World War II, the new management of the company adopted a tough line with the labor unions that were being created with the encouragement of the U.S. occupation authorities. Then-Executive Director (and later President) Katsuji Kawamata forced the company's union to accept the dismissals of more than 1,700 workers in 1949.

Kawamata demonstrated similar toughness four years later, when the militant All-Japan Automobile Industry Labor Union (known as Zenji) sought substantial wage gains. Toyota and Isuzu settled with the union after a few short strikes, but Nissan, which was determined to reduce Zenji's influence, was less willing to compromise. The result was a strike (which later turned into a lockout) that went on for 100 days. The company ended up victorious in that dispute by encouraging workers to support a new union--the All Nissan Motor Workers' Union--which adopted a more cooperative posture toward the company. The new union replaced Zenji at Nissan, and since then there have been no significant strikes at the company's Japanese operations.

This is not to say that Nissan's workers are totally satisfied with their lot. The extremely close relationship between the union and management, along with the intense pace of production on the shop floor, has created an oppressive atmosphere for the rank and file worker. When a small group of workers openly criticized working conditions and the union in 1979, they were expelled from the union and fired from their jobs.

When the company shut down its Kawaguchi diesel engine plant in 1984 and forced workers to commute to another facility more than 60 miles away or lose their jobs, the union acquiesced without a protest. By this time, however, a network of dissident groups had developed, including some that formed breakaway unions. The groups launched a campaign to protest both the Kawaguchi shutdown and the poor wage package the established union had accepted. Several of the groups called strikes at their plants but few workers dared to join in. The company responded by demoting some of the dissidents to janitorial positions. Amid his massive restructuring program in the early 2000s, chief executive Carlos Ghosn placated the company’s Japanese unions by acceding to pay increases for those workers whose jobs were not eliminated.

When Nissan opened its manufacturing facility in Smyrna, Tennessee in 1983 it sought to obtain tight control over labor without the presence of a union. The company interviewed some 120,000 applicants to find the right 2,000 workers, which meant those with an inclination to be “team players” and presumably a lack of interest in unions. Once production began, there were reports of inhumane treatment as workers were pushed to the limits of endurance, but in 1989 the Smyrna labor force voted overwhelmingly against a bid by the United Auto Workers to represent them. Another UAW organizing effort was abandoned in 1997. Four years later, the UAW petitioned for another representation election, but the union was again decisively defeated in the vote.

In 2012 the UAW made Nissan’s plant in Mississippi, which opened in 2003, the focus of a renewed organizing effort among the auto transplants. The campaign has received wide support from community and student groups.

Racial Discrimination

In 2000 it was reported that the U.S. consumer loan units of Nissan and General Motors were targets of class-action lawsuits alleging that they discriminated against African Americans by charging them significantly higher interest rates on car loans than were offered white customers. In July 2001 the New York Timespublished a front-page story about a statistical study showing a pattern of discrimination against Nissan’s black loan applicants. In 2003 Nissan’s finance unit settled the class-action lawsuit by agreeing to offer loans to hundreds of thousands of minority customers at below-market interest rates.

Subsidies

When Nissan built a Datsun truck plant in Smyrna, Tennessee in the 1980s, it received a modest amount of subsidies; two decades later the state created a new tax credit program that provided the company an estimated $200 million for the assembly plant as well as an engine plant it had opened. Nissan also received lucrative local property tax breaks at both locations. In addition, the company was given a state subsidy package worth close to $200 million when it agreed in 2005 to move its North American headquarters to Tennessee.

In 2009 the federal government granted Nissan a $1.6 billion loan in connection with the company’s plan to produce electric cars and advanced batteries at its Smyrna complex.

In 2000 the state of Mississippi put together a subsidy package initially valued at $295 million for an assembly plant Nissan decided to build in the town of Canton. The amount covered infrastructure and training costs; the company was also granted state corporate income tax credits and local property tax abatements whose value is not disclosed but which are believed to be worth hundreds of millions more. In June 2002 the state legislature approved an additional $68 million in infrastructure and training subsidies for a second phase of the plant.

A May 2013 report by Good Jobs First found that total state and local subsidies for Nissan in Mississippi could be worth about $1.3 billion.